Facts

Parties and courts: The appellants are [A. SA] (tenant, operating a medical facility) and its director [B.] (co-tenant). The respondents are the landlords, [C.] and [D.] , co-owners of the premises located in Geneva. The dispute concerns a commercial lease. The appeal was lodged against the judgment of the Court of Justice of the Canton of Geneva, Chamber for Leases and Rentals, of 3 December 2018, which had reformed the judgment of the Tribunal for Leases and Rentals of 10 April 2018.

Lease history: The landlords let the premises in 1983 to the company, which operates a medical facility there. A first lease was concluded in 1999 for five years. An early termination for the end of 2008 was accepted in 2008, but a new lease was concluded on 10 January 2009 for the period from 1 January 2009 to 31 December 2013, renewable every five years, with a notice period of twelve months. The annual rent was CHF 161,688, charges not included.

Dispute over defects: A dispute over defects in the premises arose during the lease. In 2010, the tenants withheld the rent and brought proceedings for interim measures and for the performance of works. They prevailed by judgment of 7 February 2012 and judgment of 17 December 2012.

Sale project and termination: From the end of 2014, the landlords offered the premises for sale to several persons, including Clinique and [H. SA] , Clinique [I. SA] and the tenants themselves. The price mentioned was CHF 4,800,000. On 20 June 2016, the landlords terminated the lease for 31 December 2018, on the ground that they wished to sell the premises vacant. The landlords were then aged 83 and 81.

Cantonal proceedings: The tenants requested that the termination be annulled and, in the alternative, an extension of six years. The Tribunal for Leases and Rentals upheld the termination without extension. The Court of Justice granted a single extension of two years, until 31 December 2020.

Search for replacement premises: In 2017, the tenants engaged a broker to find replacement premises of at least 450 m2, near the university hospitals. The broker found nothing, owing to the shortage of premises and the specific nature of the activity.

Expert report: On 14 December 2017, the tenants produced a real estate expert report bearing the confidential mention. They argued that the price proposed by the landlords exceeded the actual value of the premises.

Appeal to the Federal Supreme Court: The tenants lodged a civil law appeal on 21 January 2019. They principally requested that the termination be annulled and, in the alternative, an extension until 31 December 2024. They alleged arbitrariness in the establishment of the facts and the assessment of the evidence, as well as the violation of Art. 271, 271a, 272 and 272b CO and Art. 4 CC.

Considerations

Admissibility and scope of review: The civil law appeal is admissible (Art. 72 para. 1, Art. 74 para. 1 let. a, Art. 75, Art. 90 and Art. 100 FSCA), the amount in dispute exceeding CHF 15,000. The Federal Supreme Court relies on the facts established by the lower authority, unless they are arbitrary or the law has been violated (Art. 105 FSCA). Criticism of the facts is subject to the strict principle of allegation (Art. 106 para. 2 FSCA). The Federal Supreme Court applies the law of its own motion (Art. 106 para. 1 FSCA).

Findings of fact and expert report: The appellants fail to demonstrate arbitrariness. The cantonal court left open the admissibility of the expert report, but took it into account on a hypothetical basis. The fact that the landlords offered the sale to several persons is not arbitrary, nor is the finding that the parties negotiated without it being necessary to determine who made contact first. The desire to sell may coexist with a motive relating to the landlords' age, which may have existed at the time of termination. The Federal Supreme Court also holds that the cantonal court could, without arbitrariness, find the risk of losing doctors not demonstrated, the only evidence offered being the testimony of a director directly interested in the outcome.

Ordinary termination and economic termination (Art. 271 and 271a CO): Ordinary termination does not require a particular ground (Art. 266a para. 1 CO). In leases of commercial premises, termination is annullable if it contravenes the rules of good faith (Art. 271 para. 1 CO), that is, if it serves no objective, serious and worthy interest, or if it reflects a gross disproportion of interests. Termination given to facilitate a sale is in principle valid where the presence of the tenant makes the sale more difficult. In this case, this condition is met. The ground invoked is not a pretext, as it has remained constant and the landlords have seriously sought to sell since 2014. The fact that the sale has not yet been completed is explained by the wait for the tenants' departure.

Retaliatory termination (Art. 271a para. 1 let. a CO): The appellants have not demonstrated a causal link between their earlier claim and the termination. The mere proximity to the end of the three-year protection period (Art. 271a para. 1 let. e CO) is not sufficient. The age of the dispute does not prove retaliatory termination either, since no termination was given before 2016.

Termination for sale (Art. 271a para. 1 let. c CO): The question whether this provision applies to commercial premises is not decided, as it may be left open. Termination is annullable only if it aims solely to…